Guy Smiley say Yara was the most inefficient of the ammonia plants, and to "put that in yuh pipe and smoke it" Yet another example of the caring kants in the PNM, who seem not to realize that people's livelihoods they are casually dismissing with their kantish comments.

Methanex: We will shut down Titan plantCurtis Williams, Lead Editor Business

On the day that the world’s largest methanol pro­duc­er an­nounced that it had agreed to a two-month ex­ten­sion of its nat­ur­al gas con­tract with the Na­tion­al Gas Com­pa­ny, Pres­i­dent and CEO of Methanex, John Flo­ren made it clear that the Cana­di­an gi­ant is pre­pared to shut down its plant rather than sign a bad deal with the NGC.

If the plant clos­es, 100 high-pay­ing per­ma­nent em­ploy­ees will be sent on the bread­line with an­oth­er 40 con­tract work­ers al­so get­ting their pink slips.

It will al­so mean a loss of tens of mil­lions of US dol­lars for the trea­sury should it close down.

In re­sponse to ques­tions at an in­vestor re­la­tions con­fer­ence call on Fri­day, Flo­ren said, "Where we can’t earn prof­its from that plant, we rather shut it down than to run it for no prof­it."

Flo­ren in­sist­ed that Methanex must get a gas deal that al­lows it to make prof­its at the high end of the cy­cle and at least meet its Earn­ings Be­fore In­ter­est, Tax­es, and Amor­ti­sa­tion (EBI­TA) tar­get dur­ing the low cy­cle oth­er­wise it will walk away from the Ti­tan methanol plant.

"Well, I think we’re go­ing to pay a high­er price for gas in Trinidad. You know we want to pay a price where we can still earn EBI­TA and in­vest in the plant, so it’s usu­al­ly a round price. So when you have these ne­go­ti­a­tions, that slid­ing scale with methanol will con­tin­ue to be in place and we just want to be able to make sure we can sur­vive in the low end of the cy­cle and do well at the high end of the cy­cle," Flo­ren told in­vestors.

The Sun­day Guardian has re­port­ed ex­clu­sive­ly that Methanex had put things in place for the plant’s clo­sure and moth­balling be­cause af­ter a year of ne­go­ti­a­tions with the NGC, and hav­ing spent over a quar­ter bil­lion dol­lars last year in an up­grade of its Ti­tan plant, Methanex can­not reach an agree­ment with the state ag­gre­ga­tor.

If a deal is not reached by the end of March, this would be the sec­ond plant in three months to close. At the end of De­cem­ber Yara shut down its plant send­ing work­ers home be­cause it could not pay the price the NGC has been de­mand­ing for its gas.

In the last four years, thou­sands of work­ers in the en­er­gy sec­tor have lost their jobs.

At the heart of the prob­lem is the price that the NGC wants to charge the down­stream com­pa­nies for gas. The petro­chem­i­cal com­pa­nies have been say­ing that the high­er prices will mean they op­er­ate at a loss po­si­tion with glob­al prices for both methanol and am­mo­nia weak.

It is al­so a po­si­tion that was pre­dict­ed in a study done by econ­o­mist Dr Ter­rence Far­rell who found that the sus­tain­abil­i­ty of the down­stream petro­chem­i­cal sec­tor is un­der threat be­cause of un­com­pet­i­tive nat­ur­al gas prices.

The econ­o­mist said nat­ur­al gas short­ages and high prices led to a re­duc­tion in methanol and am­mo­nia pro­duc­tion and loss of jobs in the sec­tor. He pre­dict­ed that un­less there is a change in pol­i­cy, the sec­tor will get to a point of no re­turn and there will be a col­lapse of the Point Lisas In­dus­tri­al Es­tate.

'We will con­tin­ue to ne­go­ti­ate in good faith'

OW­TU pres­i­dent gen­er­al An­cel Ro­get has al­so joined an in­creas­ing cho­rus of peo­ple urg­ing a rene­go­ti­a­tion of the gas price be­tween the up­stream and the NGC so that all in the val­ue chain can sur­vive.

The Methanex pres­i­dent said his team was work­ing hard to get a deal done be­cause they and the Gov­ern­ment want the plant to be in op­er­a­tion.

“We’re try­ing to find a so­lu­tion that’s a win-win for the up­stream, the Gov­ern­ment and our­selves. So that’s what we’ll con­tin­ue to do, I’m not go­ing to ne­go­ti­ate in pub­lic.

"Our teams are work­ing hard, but there does come a point where you make a de­ci­sion—are these ne­go­ti­a­tions go­ing to get to a place where it makes sense for all par­ties or does it not.

"We’re not there yet and we’re hap­py to ex­tend the in­ter­im agree­ment, we know what our cost struc­ture is in Q1."

Flo­ren in­sist­ed that the com­pa­ny must know what its cost struc­ture is and there­fore sign­ing month-to-month con­tracts don’t work for Methanex.

He said, “So, I al­ways said I will not en­ter in­to run­ning a plant with­out know­ing my cost struc­ture, I must know what my cost struc­ture is and if it’s ac­cept­able un­der cur­rent methanol prices.

"But we will con­tin­ue to ne­go­ti­ate in good faith. I would say all par­ties want a deal and that’s al­ways a good thing and we’re op­ti­mistic we can get it done.

"We’ll con­tin­ue to ne­go­ti­ate with the Gov­ern­ment and the NGC."

Methanex pro­duced 456,000 eq­ui­ty tonnes in the fourth quar­ter of 2019 com­pared to 476,000 eq­ui­ty tonnes in the third quar­ter.

nervewrecker wrote:Rumor has it govnt trying to get their hands on Yara.

Looks as if they want to get all foreign companies out of Trinidad, hence the reason on gas prices for down streamers . The foreign Insurance companies have left and are now locally owed by certain people. Pt lisas will be a failure if owned by government as wages will be stagnated with square pegs in round holes and political appointees.